At least four people were killed in Bahrain after riot police with tear gas and clubs drove protesters from a main square where they had demanded sweeping political change.

Armed patrols prowled neighbourhoods and tanks appeared in the streets for the first time after the crackdown in Pearl Square, Manama, the site of anti-government rallies since Monday.

Barbed wire was set up on streets leading to the square, where police cleaned up flattened protest tents and trampled banners. The interior ministry declared the protest camp "illegal" and warned Bahrainis to stay off the streets.

The island nation was effectively shut down since workers in the capital could not pass checkpoints or were too scared to venture out. Banks and other key institutions did not open.

The protesters' demands have two main objectives: force the ruling Sunni monarchy to give up its control over senior government posts and all critical decisions, and address deep grievances held by the country's majority Shiites who claim they face systematic discrimination and are effectively blocked from key roles in public service and the military.

Bahrain is a pillar of Washington's military framework in the region. It hosts the US Navy's 5th Fleet, a critical counterbalance to Iran's efforts to expand its clout in the region.

Any prolonged crisis opens the door for a potential flashpoint between Iran and its Arab rivals in the Gulf. Bahrain's ruling Sunni dynasty is closely allied to Saudi Arabia and the other Arab regimes in the Gulf. But Shiite hardliners in Iran have often expressed kinship and support for Bahrain's Shiite majority, which accounts for 70% of the island's 500,000 citizens.

Sporadic clashes between police and protesters continued, with demonstrators hurling rocks, then retreating. A group of young men broke up the pavement for more stones to throw.

Demonstrators began camping out on Tuesday on the square beneath the 300ft monument featuring a giant pearl, making it the nerve centre of the first anti-government protests to reach the Arab Gulf since the uprisings in Tunisia and Egypt.

Mahmoud Mansouri, a protester, said police surrounded the camp and then quickly moved in. "We yelled, 'We are peaceful! Peaceful!'. The women and children were attacked just like the rest of us," he said. "They moved in as soon as the media left us. They knew what they're doing."